Wealth management firm PAG Group has invested Rs 2,366 crore to acquire controlling stake in Edelweiss Wealth Management.
In addition, PAG is acquiring the entire ownership of prior investors in Edelweiss Wealth Management -- Kora Management and Sanaka Capital -- taking its stake to 61.5 per cent.
Edelweiss Group will continue to hold 38.5 per cent stake in Edelweiss Wealth Management with the option to increase it further to up to 44 per cent.
Edelweiss said PAG's primary capital infusion into the wealth business will further strengthen the equity base and provide growth capital. PAG and Edelweiss will work together towards demerger and the eventual listing of business, paving way for unlocking value.
"The partnership with PAG is a strong endorsement of the quality of businesses we have built to scale over the years. Our focus will continue to be on enhancing the value of the franchise while simultaneously exploring avenues to unlock this value for the shareholders," said Rashesh Shah, Chairman and CEO of Edelweiss Group.
Nikhil Srivastava, Partner and Managing Director for Head of India Private Equity at PAG, said Edelweiss Wealth Management is one of India's leading wealth management compes with products and services that are highly regarded by customers.
"We look forward to leveraging PAG's global experience to drive innovation and transformation to further strengthen Edelweiss Wealth Management's market position and create long-term value for all stakeholders," he said.
The Rs 300 lakh crore Indian wealth management industry has been expanding rapidly at a five-year CAGR of 11.3 per cent. With a strong estimated growth trajectory of 12.5 per cent per year going forward, it is expected to reach Rs 540 lakh crore in the next five years.
Edelweiss Wealth Management reported revenues of Rs 880 crore and profit after tax of Rs 180 crore for 9M FY21. It services over 2,400 of India's wealthiest families as well as 6.7 lakh affluent and high net-worth individuals.
PAG is a leading private equity investor in Asia's fast-growing economies and is keen on the Indian market, where it expects to invest more than Rs 7,000 crore over the next two to three years.
( With inputs from ANI )
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